Environment

Colorado enforcers favor practical atonement for oil and gas spills

State government enforcers increasingly are letting oil and gas companies that break rules do public service projects instead of imposing formal penalties.

The shift reflects evolving efforts by the Colorado Oil and Gas Conservation Commission to cope with expanding industrial operations in a way that demonstrably helps harmed communities.

The COGCC "continually seeks to put into practice a robust enforcement program," COGCC director Matt Lepore wrote in response to Denver Post queries.

But Colorado's ability to minimize environmental harm is strained as the number of active wells statewide now exceeds 51,000 and the state has only 15 inspectors to keep track of them, as well as monitor cleanup at closed wells.

Oil and gas spills are happening at the rate of one a day — with 2,475 spills reported by companies since 2008, state data show. Many spills aren't treated as violations under current state rules.

Recent spills — 241 so far this year — include one that contaminated groundwater with cancer-causing benzene at levels up to 340 times higher than state limits, state data show. Anadarko crews discovered the spill along the South Platte River in Weld County, and reported it on July 19. Anadarko spokesman John Christiansen said the spill happened when another company ran the site. Anadarko is planning a cleanup. COGCC inspectors are investigating.

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When companies are found at fault, consent deals have emerged as an expeditious alternative to hearings required to impose formal penalties.

COGCC enforcers set a penalty amount, and the company involved then is given the option of doing a public project. As dollars are spent, they defray the penalty. Companies admit no wrongdoing and can re-kindle community goodwill.

State commissioners have signed off on 16 consent deals so far this year, compared with nine in all of 2012, state data show. Lepore said the deals "can include penalties in excess of that allowed under current statutory limits."

For example, PDC Energy agreed in May to a $35,000 penalty for an 84,000-gallon spill of toxic fluids in farm fields north of Windsor. Under state rules, the maximum formal penalty would have been $9,000.

The COGCC gave PDC an option of training local emergency responders to deal with oil spills. Several sessions were held, and the training was "well-received," Windsor Severance Fire Rescue battalion chief Todd Voss said. "PDC seems genuinely to want to be a good neighbor."

Another deal addressed an Anadarko spill in March — blamed on mechanical failure — that spewed at least 93,618 gallons into Weld County soil. Company crews excavated and removed 13,710 cubic yards of contaminated soil. A penalty was set at $42,500.

Anadarko has proposed to deploy a solar-powered monitoring system that detects hydrocarbons, spokeswoman Robin Olsen said. Anadarko won't deduct the cost for income tax purposes, she said.

Local governments welcome this approach.

"It allows the companies to actually do something beneficial for the communities that have suffered the impact," Weld County commissioner Sean Conway said.

Such deals do serve company image interests, Conway said. "But, if it's a straight fine, it just goes into state government, and it is lost. I don't see the direct benefit there. The community never realizes what accountability there was."

Colorado lawmakers this year rejected legislation to significantly toughen state rules for the oil and gas industry, including a push to give the COGCC a purely regulatory mission. The COGCC is tasked with promoting the industry while simultaneously enforcing rules to protect Colorado. COGCC last week gave PDC and Anadarko "Outstanding Operator" awards.

However, a rule tweak taking effect this week requires companies to notify authorities verbally of any spill of more than 42 gallons — compared with 210 gallons before. Companies still are given 10 days before details must be submitted in writing.

State enforcers also are trying to shore up protection for wildlife habitat.

"In some cases, new wells will be subject to consultation" with state biologists, Lepore said. "In others, this requirement may no longer apply."

The overall number of state inspectors is expected to increase to keep pace with the expanding oil and gas operations.

COGCC enforcement currently has 15 inspectors who are charged with monitoring operations at about 51,000 active wells statewide, in addition to oversight of waste disposal and cleanup at depleted drilling sites.

Those inspectors physically visited 6,179 industry sites this year and conducted inspections of 10,678 wells, state data show, confirmed by Lepore. COGCC supervisors this month are interviewing candidates for six new positions. They plan to hire another six by early 2014, which would bring the total to 27.

"More inspectors on staff," Lepore said, "will mean that more inspections are conducted."

Three inspectors are to be equipped with infra-red cameras to detect toxic leaks. One camera in use is borrowed from the Regional Air Quality Council. COGCC officials recently purchased two more. While the cameras cannot measure how much has leaked, they can help pinpoint the source.

Infra-red cameras, Lepore said, "are another tool to promote best practices and to reduce impacts."

Oil and gas spills reported by companies since 2008, according to state data

241

Oil and gas spills that have been reported so far this year 16 Number of "consent deals" made by commissioners this year, where companies are found at fault for a spill and pay a fine but admit no wrongdoing

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